The Search For Compromise On K-12 Funding

HB 1843 and SB 5607 both attempt to address student inequity in the K-12 system, but lawmakers disagree on which approach works best. However, it's an area that might be ripe for compromise. Photo: www.esd401.org

At a February 9 hearing of the House Appropriations Committee, lawmakers exchanged conflicting views on how to best fund K-12 education prior to an 18-15 vote passing House Democrat HB 1843. Similar remarks on a competing Senate Republican bill SB 5607 at a February 6 public hearing of Appropriations foreshadow the extent to which solving student equity dominates anticipated negotiations later in the session.

Also at the forefront of the discussion is local school district taxing authority and accountability reforms on how that money is spent. Compromises in these areas could come into play when House Democrats release a funding solution for their plan, expected to add $7.5 billion in new spending over the next four years.

Avoiding Another McCleary Violation

State Rep. Matt Manweller (R-13) argued Thursday, February 9 to colleagues that HB 1843’s continuance of a local levy lid rate scheduled in 2018 would create “an absolute assurance we will do what we’ve promised not to do, which is to provide an education based on your zip code. We are ‘solving’ McCleary by using a regressive tax that ensures a violation for McCleary.”

While much of the focus for lawmakers is complying with the State Supreme Court’s 2012 McCleary decision by shifting basic education spending away from local districts, statehouse observers have noted the importance of using new education spending to address statewide disparities in academic achievement.

It was a point raised by Superintendent of Public Instruction Chris Reykdal Monday, February 6 to panel members, who said “if you don’t do things differently, you will not get a different result in communities” with low academic performance.

“It’s not just about solving a court case, though that’s an impetus for some of the work,” he said. “It’s not just about spending more money, although you can get better results if you make the right investments.”

The rival bills take separate tacks on how to reduce existing inequity through K-12 funding. SB 5607 swaps the prototypical school funding model, in which state money is allocated for school faculty based on student population, with a baseline spending per pupil. It then provides additional funding for students who are special needs, highly capable, homeless, low income, or English language learners. The Senate Republican proposal also contains academic goals for Washington schools to reach by 2020. HB 1843 continues the current model, but includes additional funding for students in those programs.

Reykdal: Invest New Money Where It’s Needed

Reykdal told panel members “we don’t necessarily drive dollars into communities that need it the most,” something both bills attempt to change. It’s an area “you should be ultimately thinking about compromise on this, because it (inequity) is disproportionately impacting low income, rural communities,” he added.

He later told Lens that “you could build a prototypical model, then layer investments in areas they (Senate Republicans) want to do more work…you can do lots of things on prototypical and still gets the Senate’s interest. The mechanics of how we get there are really pretty doable either way. They got to figure out what their highest values are, then design an allocation system from there.”

Deciding The Future Of Local Levies

However, lawmakers are also in conflict over the role of local school district levies. SB 5607 eliminates existing maintenance and operation levies and replaces them with a new statewide local property tax of $1.80 per $1,000 in assessed valuation (AV). The move would lower property taxes in all but 50 of the state’s 295 school districts. That rate would eventually be lowered to $1.20. Starting in 2020, school districts could pass new local levies, but the amount raised could be no greater than 10 percent of total state and federal funding.

The current maximum levy rate is 28 percent, but it is scheduled to decrease next year to 24 percent. HB 1843 gradually lowers that lid down to 24 percent by 2021 and changes the basis for the calculations, but maintains that rate.

The competing bills also differ in how they handle local levy accountability. SB 5607 requires the Office of Public Instruction (OSPI) review all proposed levy measures prior to making the ballot, and mandates audits of levy spending. HB 1843 calls on OSPI to create a work group to recommend any changes to how local districts track levy money.

Manweller: Don’t Pave Way For McCleary 2.0

However, that would simply pave the way for McCleary 2.0 because “there are no consequences for breaking the law” if districts use levy money for basic education, said Manweller.

In agreement was State Rep. Paul Harris (R-17), who told colleagues there needed to be “segregation for accounts that I think will help us to not end up in the same place again. One of the reasons we ended up in this certain situation is the lack of oversight of expenditures. This bill (HB 1843) does nothing to deal with reforms. As it stands today, it needs some work.”

Finding Compromise On Levy Authority

However, the bill’s chief sponsor and House Majority Leader Rep. Pat Sullivan (D-47) said districts need that extra taxing authority to offer enhancement programs desired in their communities.

“If you want to restrict the local voters’ ability to fund programs within their school districts, then you’re just hurting kids,” he said.

Earlier this month, Sullivan told Lens that “voters want to make decisions locally. That’s why we elect local school boards. Rather than take away their authority, we want to work with them to give them the responsibility and the tools necessary to actually do a job they’re tasked to do.”

It’s another area Reykdal sees opportunity for compromise. “What do you leave in terms of flexibility with the levies you have left, so whether it’s 10 percent or 24 or 16 or something, at the end what are you going to allow districts to do with it? That’s the bigger conversation,” he said.

The outcome of that conversation could affect negotiations over any proposed funding solution for McCleary. Although House Democrats have not introduced a funding mechanism for HB 1843’s new spending, Democrat panel members of the Joint Education Task Force recommended the legislature consider a slew of new tax proposals similar to those contained in Governor Jay Inslee’s proposed 2017-19 biennial budget. OSPI is currently working on the fiscal impacts of SB 5607, but it is not known when that report will be completed.

Regarding potential new taxes to pay for K-12, Sullivan told Lens that “we want to gauge the impacts it has on the community and the business community and taxpayers across the state. We’ve got to be thoughtful about that.”